How can homes get smaller without looking that much smaller? By subtly taking space from areas where some home designers waste it, says Jeff Benach, executive vice-president of sales and marketing for Chicago's Lexington Homes.

"You want to be more clever about where you put windows and skylights, because maybe you have only one or two windows in a great room, whereas before you had three or four throwing light in," says Benach, whose company is finding ways to save space at its Lexington Square townhomes in Bridgeport.

"It's great to have a nice big landing at the top of the staircase. But if you're judicious about square footage, you might want to have that 100 square feet in the bedrooms, rather than out in the hallway."

When CA Development sought to save space in its Smart Choice homes, it focused on eliminating wasted hallway space, Paul Bertsche says. Another trick was to make some rooms more flexible, so they weren't limited to one use, he adds.

Smykal Homes downsized foyers and deep-sixed some dining rooms in homes where large enough kitchens existed. "You have to make every square foot count," Peggy Taheri says. "And yet you still have to think of things like logical access from the exterior to the interior, and a proper amount of wall space."

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